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China approves retaliatory tariffs worth $50 billion on US imported goods

Economic security, worldwide, is therefore much less certain as Trump pursues this path

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Earlier this year, Trump announced tariffs against Chinese goods, which prompted retaliatory tariffs from Beijing.

Trump followed up China’s retaliation with even further punitive measures, which China then responded to before negotiations in Washington managed to cool the tensions down somewhat.

However, within a very brief time, Washington came back out with its tariffs against China, particularly relative to Chinese metals, in a similar fashion as was also being applied to other US trade partners with the pretext of reducing trade deficits which were perceived by the Trump administration as a threat to American national security, sparking outrage from US European, Canadian, Japanese, Korean, and Mexican trade partners, among others.

With the Trump administration’s renege on the trade wars truce which had just been hashed out, China is now responding with tariffs of its own worth $50 billion.

The South China Morning Post reports:

China’s Finance Ministry has imposed an additional 25 per cent tariff on some US$50 billion of US imports and said the US has invalidated recent high-level talks aimed at averting a trade war

China has hit back at US President Donald Trump after he slapped punitive tariffs on Chinese goods on Friday, announcing that it would place its own additional 25 per cent tariffs on 659 US imports worth a total of US$50 billion.

Tariffs on about US$34 billion of those products will start on July 6, and be applied to soybeans, corn, wheat, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables, autos and aquatic products, China’s finance and commerce ministries said.

In addition, China said Trump’s move invalidated recent high-level negotiations aimed at averting a trade war.

“All the previous agreements reached through talks will become invalid,” the Ministry of Commerce said in the statement. “China doesn’t want to engage in a trade war, but in face of the shortsighted acts from the US side … China is forced to take strong and forceful measures to hit back,” it said.

The effective date of the tariffs on the remaining US$16 billion of American goods will be announced later, the commerce ministry said. Among those items are crude oil, natural gas, coal and some refined oil products.

The list of 659 US goods was longer than a preliminary list of 106 products published by the Chinese commerce ministry in April, although their remained unchanged at US$50 billion. Aircraft, which were previously included, were not on the revised list.

China’s response came on Friday afternoon, hours after Trump confirmed his plan to slap punitive tariffs on Chinese products that “contain industrially significant technologies”. The move is part of his effort to close a bilateral trade gap and force Beijing to change the way it acquires US technology.

The US will put a 25 per cent tariff on US$50 billion worth of annual imports from China, including “goods related to China’s Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the United States and many other countries”, Trump said in an official White House statement.

Made in China 2025 refers to Beijing’s industrial policy of subsidising domestic companies developing strategic advanced technologies, including robotics and artificial intelligence.

China has “long been engaging in several unfair practices related to the acquisition of American intellectual property and technology. These practices … harm our economic and national security and deepen our already massive trade imbalance with China,” Trump said.

US stocks retreated on Friday amid the countries’ competing announcements, with major indices in the red the entire session, although they closed above their session lows.

The Dow Jones Industrial Average dropped 0.3 per cent to end the week at 25,090.48. The broad-based S&P 500 slipped 0.1 per cent to close at 2,779.42, and the tech-rich Nasdaq Composite index lost 0.2 per cent to 7,746.38, retreating from Thursday’s record.

Large multinationals active in China were among the worst performers in the Dow, with Caterpillar losing 2 per cent and Boeing and General Electric both falling more than 1 per cent.

Petroleum-linked shares also tumbled on a pullback in oil prices due in part to the trade discord. Chevron fell 2 per cent, Halliburton 2.4 per cent and ConocoPhillips 4.1 per cent.

Trump’s announcement on Friday follows up on pledges he has made since he campaigned in 2016 to address the long-running US trade deficit with China.

That gap rose to a record US$375 billion last year and amounted to US$119 billion in the first four months of 2018, according to US government data.

Trump vowed to fight any retaliation by China – be it tariffs, non-tariff barriers or “punitive actions against American exporters or American companies operating in China” – with additional tariffs, raising the possibility of an all-out trade war.

“The Trump administration is now committed to tariffs on US$50 billion of imports from China, and China has signalled that it will retaliate on US$50 billion of US exports,” David Dollar, a China expert at the Brookings Institution, a Washington-based think tank, told the South China Morning Post.

“The question that no one can answer right now is whether Trump will then escalate into a full-blown trade war. It is hard to see either side backing down in the near future.”

Trump has bipartisan support among lawmakers to take measures to curtail acquisition of US technology by Chinese interests, as many of them see such transfers as strengthening China’s military capabilities.

Some technology sought by Chinese investors has military applications, the US Defence Department warned in a report published last year.

The Trump administration’s tactics are bumping up against Beijing’s overarching economic ambitions.

“One of the things that [Chinese President] Xi Jinping is focused on is the transformation [of his country] from the manufacturing centre of the world to the innovation centre of the world,” Elizabeth Economy, director for Asia Studies at the Council on Foreign Relations, said in a discussion at the Wharton Global Forum on Thursday.

“They’re using subsidies to encourage Chinese firms and give them an advantage,” she said. Moreover, “a number of restrictions or regulations … make it difficult for foreign companies to compete” in China, Economy said.

US Trade Representative Robert Lighthizer has led investigations into the trade and investment practices Trump has targeted.

A nearly 200-page report from the trade representative’s office published in March alleges, among other things, that these policies “deprive US companies of the ability to set market-based terms in licensing and other technology-related negotiations with Chinese companies and undermine US companies’ control over their technology in China”.

Still, some in the US corporate sector are condemning Trump’s decision to address trade imbalances and investment restrictions through unilateral tariff measures.

“We urge both governments to sit down and negotiate a solution to these important issues. American companies want solutions, not sanctions,” US-China Business Council (USCBC) President John Frisbie said in a statement.

“Tariffs will not solve these problems, but will harm American economic interests and jobs. Rather than inflicting damage on ourselves, we should be seeking ways to address the problems with China,” he said.

“Pursuing pragmatic outcomes in coordination with other like-minded trading partners is a better approach than going it alone and exposing American workers, farmers and companies to retaliation.”

Some analysts played down the urgency of the latest phase in US-China trade tensions, pointing out that both sides have returned to dialogue despite regular rhetorical flare-ups.

“Clearly there’s a lot of ups and downs, and both sides seem to be OK with that,” Bart Oosterveld, director of the Washington-based Atlantic Council’s Global Business and Economics Programme, told the Post.

“They do seem to get past pretty rough statements made against each other and then get back to the table again.”

Oosterveld said he expected the parties would strike an agreement that could halt the confrontation “probably at some point this year”.

Allowing the trade battle to continue would be “very costly” over time for “both economies and for consumers in both economies”, the director said. “In the meantime, we may see some further escalations.”

Derek Scissors, a China expert at the American Enterprise Institute, another Washington-based think tank, agreed.

“This is far too small a step to lead to a serious trade conflict,” Scissors told the Post.

“I believe the initial tariffs will go into effect July 6. However, the second set of tariffs allows time for negotiations, which could lead to the initial tariffs being lifted after only a few months.”

The White House announcement on Friday did not say when the US tariffs would take effect.

Trump is pushing forward on his agenda to even things out with America’s trade partners, regardless of the consequences, under the assumption that he can just throw America’s economic weight around in an aggressive manner while expecting that respect for America alone will serve as enough of a deterrent against meaningful consequences adversely impacting America’s political and economic hegemony, as well as its own domestic well being.

Not only is China broadening its trade horizons with an ever growing list of markets, but so too is Europe.

Mexico, too, is looking for other suppliers from which to purchase certain agricultural goods in a bid to decrease the detrimental effect of an escalating trade conflict with America.

Economic security, worldwide, is therefore much less certain as Trump pursues this path, and the trade arrangements that have brought America, China, Europe, and North America to their respective places in the global economy are changing in very radical ways, often in ways that don’t respect America’s position. Meaning, therefore, that Trump’s policies, rather than putting America first, are, in effect, putting America last.

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Rastislav Veľká MoravaJNDillardghartwellDaisy Adler Recent comment authors
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Rastislav Veľká Morava
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Rastislav Veľká Morava

It is time to END Globalism, US Led, China Led, EU Led, or any other.

JNDillard
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JNDillard

What is to keep China from simply shifting its trade to other, non US markets, as Russia has done and Iran is doing with the US and EU?

ghartwell
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Sounds like a set up to increase cooperation, trade and development in other than American countries to their benefit like sanctions benefited the Russian economy. Punish other and punish yourself. Break cooperation with the world and the world leaves you behind.

Daisy Adler
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Daisy Adler

Latest News:
China “threatened to impose tariffs on US energy products in response to $50 billion in tariffs imposed by US President Donald Trump. Such tariffs would inhibit Chinese refiners from buying US crude imports, potentially crashing US energy markets and hitting the fossil fuel industry where it hurts the most…
China imports approximately 363,000 barrels of US crude oil daily. The country also imports about 200,000 barrels a day of other petroleum products” https://sputniknews.com/world/201806171065497038-china-crude-oil-tariff-US-suprise/

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FBI recommended Michael Flynn not have lawyer present during interview, did not warn of false statement consequences

Flynn is scheduled to be sentenced on Dec. 18.

Washington Examiner

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Via The Washington Examiner…


Former FBI Deputy Director Andrew McCabe, who arranged the bureau’s interview with then-national security adviser Michael Flynn at the White House on Jan. 24, 2017 — the interview that ultimately led to Flynn’s guilty plea on one count of making false statements — suggested Flynn not have a lawyer present at the session, according to newly-filed court documents. In addition, FBI officials, along with the two agents who interviewed Flynn, decided specifically not to warn him that there would be penalties for making false statements because the agents wanted to ensure that Flynn was “relaxed” during the session.

The new information, drawn from McCabe’s account of events plus the FBI agents’ writeup of the interview — the so-called 302 report — is contained in a sentencing memo filed Tuesday by Flynn’s defense team.

Citing McCabe’s account, the sentencing memo says that shortly after noon on Jan. 24 — the fourth day of the new Trump administration — McCabe called Flynn on a secure phone in Flynn’s West Wing office. The two men discussed business briefly and then McCabe said that he “felt that we needed to have two of our agents sit down” with Flynn to discuss Flynn’s talks with Russian officials during the presidential transition.

McCabe, by his own account, urged Flynn to talk to the agents alone, without a lawyer present. “I explained that I thought the quickest way to get this done was to have a conversation between [Flynn] and the agents only,” McCabe wrote. “I further stated that if LTG Flynn wished to include anyone else in the meeting, like the White House counsel for instance, that I would need to involve the Department of Justice. [Flynn] stated that this would not be necessary and agreed to meet with the agents without any additional participants.”

Within two hours, the agents were in Flynn’s office. According to the 302 report quoted in the Flynn sentencing document, the agents said Flynn was “relaxed and jocular” and offered the agents “a little tour” of his part of the White House.

“The agents did not provide Gen. Flynn with a warning of the penalties for making a false statement under 18 U.S.C. 1001 before, during, or after the interview,” the Flynn memo says. According to the 302, before the interview, McCabe and other FBI officials “decided the agents would not warn Flynn that it was a crime to lie during an FBI interview because they wanted Flynn to be relaxed, and they were concerned that giving the warnings might adversely affect the rapport.”

The agents had, of course, seen transcripts of Flynn’s wiretapped conversations with Russian then-ambassador Sergey Kislyak. “Before the interview, FBI officials had also decided that if ‘Flynn said he did not remember something they knew he said, they would use the exact words Flynn used … to try to refresh his recollection. If Flynn still would not confirm what he said … they would not confront him or talk him through it,'” the Flynn memo says, citing the FBI 302.

“One of the agents reported that Gen. Flynn was ‘unguarded’ during the interview and ‘clearly saw the FBI agents as allies,'” the Flynn memo says, again citing the 302.

Later in the memo, Flynn’s lawyers argue that the FBI treated Flynn differently from two other Trump-Russia figures who have pleaded guilty to and been sentenced for making false statements. One of them, Alexander Van der Zwaan, “was represented by counsel during the interview; he was interviewed at a time when there was a publicly disclosed, full-bore investigation regarding Russian interference in the 2016 election; and he was given a warning that it is a federal crime to lie during the interview,” according to the memo. The other, George Papadopoulos, “was specifically notified of the seriousness of the investigation…was warned that lying to investigators was a ‘federal offense’…had time to reflect on his answers…and met with the FBI the following month for a further set of interviews, accompanied by his counsel, and did not correct his false statements.”

The message of the sentencing memo is clear: Flynn, his lawyers suggest, was surprised, rushed, not warned of the context or seriousness of the questioning, and discouraged from having a lawyer present.

That is all the sentencing document contains about the interview itself. In a footnote, Flynn’s lawyers noted that the government did not object to the quotations from the FBI 302 report.

In one striking detail, footnotes in the Flynn memo say the 302 report cited was dated Aug. 22, 2017 — nearly seven months after the Flynn interview. It is not clear why the report would be written so long after the interview itself.

The brief excerpts from the 302 used in the Flynn defense memo will likely spur more requests from Congress to see the original FBI documents. Both House and Senate investigating committees have demanded that the Justice Department allow them to see the Flynn 302, but have so far been refused.

In the memo, Flynn’s lawyers say that he made a “serious error in judgment” in the interview. Citing Flynn’s distinguished 30-plus year record of service in the U.S. Army, they ask the judge to go along with special counsel Robert Mueller’s recommendation that Flynn be spared any time in prison.

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Macron offers crumbs to protestors in bid to save his globalist agenda (Video)

The Duran Quick Take: Episode 36.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Via Zerohedge


As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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